Shared Article from Business Insider

Frak, frak, frak. This is a shame. It’s also a sign of some things we need to get seriously careful about.

We need to talk about new security models for online black markets.

If the Feebs’ bill of particulars is accurate, then it’d seem that there were a lot of unforced errors here. That said, in this case it sounds like a lot of the case was allegedly built either by being in from the start and placing undercovers, or else by starting out with a series of controlled buys and then using their position over time to move on to actually infiltrating the support staff. From the looks of things their campaigns over the last year or so have been pretty aggressive. In either case, this sounds like a good reason to think that part of the security model needs to be working on ways of doing business in other ways — perhaps, in particular, through smaller federated sites and peer-to-peer relationships rather than through single clearing-house servers, — because Tor and Bitcoin at this point are not nearly enough to cope with the threat model.

Comment on GT 2014-09-08

I don’t have any utopian expectations about Bitcoin. The protocol design is thoughtful, and the underlying technology is kind of cool, especially if you’re interested in peer protocols or in cryptography. It’s an alternative form of money, which allows for near-instant transfers and substantial anonymity in transactions across long distances. Like other alt-currencies and like other craftily designed peer protocols, it may become a useful component in developing counter-economic institutions and helping to build social and economic infrastructure beyond the control of the state-capitalist status quo. I hope it will. But if so, it will be because it is one useful hack among many that we can employ. Bitcoin is not magic; it’s not the only thing that’s important; it’s not a revolution by itself. It is a tool; and one that I’ve found it a useful one from time to time. Evidently other people do, too.[1]

As people have become more interested in Bitcoin, a lot more articles have been published about it. It’s common for gold bugs to publish increasingly shrill apriori denunciations of Bitcoin because it is (they claim) not backed by a scarce commodity of independent economic value; and (they are convinced) only money that’s backed by a scarce commodity of independent economic value can be sustainable in the long run. I think that idea is probably wrong from the get. But even if it’s correct, it’s irrelevant: Bitcoin is backed by a valuable commodity. Or more precisely, Bitcoin blocks are a valuable commodity; they are constituted by scarce, computationally-expensive, cryptographically useful calculations performed by participants in the network (especially by Bitcoin miners). Those are scarce resources (it takes computing equipment and network communications and electricity to generate them). And they are valuable goods. They are valuable in virtue of the computational work they make possible. Almost none of the blanket attacks on Bitcoin take the value of cryptographic computation, or of the communication protocols that it establishes, into account; see, for example, this silly article from Gizmodo, which starts out by pointing out some really pretty awesome facts about the power of distributed computing, and how much dispersed computational work is being harnessed to keep the Bitcoin network and blockchain in working order:

According to Bitcoin Watch, the whole Bitcoin network hit a record-breaking high of 1 exaFLOPS this weekend. When you’re talking about FLOPS, you’re really talking about the number of Floating-point Operations a computer can do Per Second, or more simply, how fast it can tear through math problems. It’s a pretty common standard for measuring computer power. An exaFLOPS is 1018, or 1,000,000,000,000,000,000 math problems per second. The most powerful supercomputer in the world, Sequoia, can manage a mere 16 petaFLOPS, or just 1.6 percent of the power geeks around the world have brought to bear on mining Bitcoin. The world’s top 10 supercomputers can muster 5 percent of that total, and even the top 500 can only muster a mere 12.8 percent.

… and then bizarrely concludes that, therefore, this awesome computational power is being wasted, when it could have been devoted to an awesome real problem, like processing SETI@Home data:

. . . because the new ASIC miners—machines that are built from scratch to do nothing but mine Bitcoins—can’t even do other kinds of operations, they’re left out of the total entirely. So what we’ve got here is a representation of the total power spent on Bitcoin mining that could theoretically be spent on something else, like real problems that exist naturally.

Because of the way Bitcoin self-regulates, the math problems Bitcoin mining rigs have to do to get more ‘coin get harder and harder as time goes on. Not to any particular end, but just to make sure the world doesn’t get flooded with Bitcoins. So all these computers aren’t really accomplishing anything other than solving super difficult and necessarily arbitrary puzzles for cyber money. It’s kind of like rounding up the world’s greatest minds and making them do Sudokus for nickels.

Projects like Folding@Home and SETI@Home use similarly networked power for the less-pointless practices of parsing information that could lead to more effective medicines or finding extra-terrestrial life, respectively, and either are hard-pressed to scrounge up even half of a percent of the power the Bitcoin network is rocking. And with specialized Bitcoin-mining hardware on the rise, there’s going to be an army of totally powerhouse PCs out there that are good for literally nothing but digging up cybercoins.

It’s incredible to think about the amount of power being directed at this one, singular purpose; power that’s essentially being “donated” by thousands of people across the globe just because they have skin in the game. It’s by far the most computational effort that has ever been devoted to a single purpose. And sure, Bitcoins are fine and all, but can you imagine what we could do if this energy was put behind other tough problems? We’ll you’re going to have to imagine, because so long as mining Bitcoins can earn you money and folding proteins can’t, it’s pretty clear which one is gonna get done.

I guess that would be a pretty big waste, if the Bitcoin network did not provide a useful service with the results of that work.

But it does.

The implicit claim that maintaining the blockchain in working order, — a computationally-expensive task which provides an anonymous, cryptographically-verified international account ledger and a free peer-to-peer global money transfer service to anyone in the world with an Internet connection, — somehow provides less of value to the world than SETI@Home is of course completely unsubstantiated by anything in the article, and is really pretty laughable.

For what it’s worth the article’s other direct claim — that Bitcoin mining is somehow taking up scarce spare cycles that might otherwise have been put to use on other distributed computing projects — is also an odd claim, and not one substantiated by anything in the article. What is far more likely is that the opportunity cost of Bitcoin mining is something completely different — if miners weren’t building ASIC rigs, they would almost certainly not be spending the money on equipment and electricity for Folding@Home or other distributed computing projects; they’d be spending it on some other money-making venture, or on leisure.

[1] I have no idea whether or not the current, massive jump in Bitcoin prices means that it is in the midst of a speculative bubble; or whether it just means that demand is increasing because more people have a genuine use for what Bitcoin provides. I don’t think much turns on this unless you’re trying to make money by timing the market. Which is probably not a great idea in the first place. ↩

Comment on GT 2013-08-07

From an article a couple weeks back, on anniversaries and Resurrected Landmarks, by Eric Meyer. Boldface mine.

It was just last week, at the end of April, that CERN announced the rebirth of The Very First URL, in all its responsive and completely presentable glory. If you hit the root level of the server, you get some wonderful information about the Web’s infancy and the extraordinary thing CERN did in releasing it, unencumbered by patent or licensing restrictions, into the world, twenty years ago.

That’s not at all minor point. I don’t believe it overstates the case to say that if CERN hadn’t made the web free and open to all, it wouldn’t have taken over the net. Like previous attempts at hypertext and similar information systems, it would have languished in a niche and eventually withered away. There were other things that had to happen for the web to really take off, but none of them would have mattered without this one simple, foundational decision.

I would go even further and argue that this act infused the web, defining the culture that was built on top of it. Because the medium was free and open, as was often the case in academic and hacker circles before it, the aesthetic of sharing freely became central to the web community. The dynamic of using ideas and resources freely shared by others, and then freely sharing your own resources and ideas in return, was strongly encouraged by the open nature of the web. It was an implicit encouragement, but no less strong for that. As always, the environment shapes those who live within it. . . .

It’s worth noting that as hypertext technologies go, the web stack (HTTP, HTML 1) wasn’t the most sophisticated implementation; in many ways it still isn’t. But it was operational, and available, and learnable, and it was free and open. And that has made all the difference between science-fiction dreams and a fundamental, transformational shift within world culture, society and learning.

In other news, thanks to Eric for reminding me to wish a very happy belated 10th anniversary to CSS Zen Garden.

Coalitions of the Willing

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